The US state of California has declared a major electricity emergency. Millions of its inhabitants now face the prospect of rolling blackouts in an effort to conserve power.

Any power cuts would affect entire neighbourhoods for about an hour at a time and would be used as a desperate, last-minute measure to avoid a total collapse of the state's electricity system.

The severe lack of power is being blamed on a shortage of natural gas. About a third of all California's power is produced at gas-fired plants, but these are being forced to switch to oil to run their generators, a move which could further disrupt production.

A spokesman for the agency which manages most of California's power grid said the reopening of schools, offices and factories after Monday's Martin Luther King public holiday was a key factor in pushing up electricity demand.

Bankrupt

At the same time, Southern California Edison, the utility which serves about 11 million of California's 34 million residents, is facing bankruptcy.

Crippled by soaring wholesale electricity prices, the company has told the financial markets it cannot pay $600m it owes creditors.

The governor of California, Gray Davis, is holding emergency talks with power officials to try to alleviate the crisis.

They are discussing a plan under which the state would buy power inexpensively, using its good credit, then sell it on to the utilities.